CIOs expect low IT investment

By Siyabonga Africa for Intel

Johannesburg, 25 May 2009

More than 77% of local CIOs, who took part in Intel's Enterprise Survey 2009, expect drastic cuts in IT investment as a result of the global economic crisis.

At the same time, 73% of the 51 local IT executives surveyed believe investment in new IT will bring about the cost savings that senior managers want.

The global survey was conducted by Coleman Parks, on behalf of Intel, in January. More than 511 international senior IT decision-makers, from eight countries around the world, including SA, Germany, Italy and the UK, took part.

“Businesses are looking to reduce costs and are assessing IT spend. This is understandable as we move through this economic downturn,” says Intel sub-Saharan Africa GM Devan Naidoo.

“Yet cost-cutting for the sake of short-term intervention can be detrimental to the overall business. Instead, well-focused IT spending can actually drive down business costs and improve enterprise performance.”

The chipmaker says local companies could save more than 40% on their electricity costs by investing in PCs with smarter chipsets.

Naidoo adds that the best strategy to come out of a recession is to “invest your way out”. This is a sentiment expressed in the survey, which shows 53% of the interviewed CIOs believe now is the time to invest in IT as companies prepare for an economic upturn.

“Intel has invested more than $7 billion (R58 billion) in factories that build our chips. Our maxim is that every two years we will continue to build processors with double the transistors. We encourage our vendors to know the benefits of the new technologies we bring so that they impress that on CIOs, who can present them to their senior executives.”

Investing smart

Naidoo says Intel's research shows CIOs want smarter, more secure IT solutions, which reduce and simplify the burden of IT management. Seventy-one percent of the local CIOs said green IT was more about good business practice than about being eco-friendly.

“Yet, it has a much broader appeal towards the environment than that,” Naidoo adds. “Big server communities, such as banks or large corporations, could drive down their energy consumption and running costs by investing in new servers and PCs; at the same time they can also reduce their carbon footprint.”

Intel says constricting capital expenditure can lead to an increase in overall spend by tying businesses to the extended use of older and less efficient technology. This was reflected in the local 2009 spending priorities, such as consolidating the data centre (50%), legacy modernisation (48%) and reducing power and cooling costs (47%), which topped the list.

Stemming from this, more than 73% of CIOs believe further investment now is needed to deliver the level of savings required over the medium-term. Naidoo believes this can be achieved by investing in modern technologies.

Hannes Fourie, a senior analyst on systems and infrastructure solutions at IDC SA, says CIOs will focus on projects that will give them a quick turnaround on investment this year.

Fourie says some of the key IT investments CIOs are expected to make include extending the lifespan of their PCs, and optimising existing infrastructure in the data centre through consolidation and virtualisation implementations.

“Mobilisation of the workforce is a key focus for most CIOs. With mobile strategies, security becomes a factor as more of your organisation is exposed. This will in itself grow the security market as well.”